by , @TomLoftus_CJ –

FRANKFORT, Ky. – As Gov. Matt Bevin warns that Kentucky’s tax code is already riddled with more than 300 loopholes, state lawmakers continue to propose more tax breaks for everything from buying gold bullion to donating “apparently wholesome food.”

“We exempt more income in Kentucky than we take in,” Bevin complained earlier this month in his State of the Commonwealth. “That’s going to have to change.”

But the number of tax credits, exemptions and exclusions may grow a bit before the governor gets around to asking lawmakers to cut it at a special legislative session he’s said he will call to reform the tax code and raise revenues later this year.

During the current legislative session, lawmakers of both political parties have filed about 40 bills that seek new tax breaks to help volunteer firefighters, disabled veterans, adoptive parents and others including folks who live near airports and want to soundproof their homes.

Other proposed tax breaks are aimed at helping revive employment in the coal fields or other economically distressed regions.

“If you look at any of them in isolation, somebody can make a case for them. But they don’t exist in isolation. They take money off the top before we spend the first dollar on schools or universities or anything else,” said Jason Bailey, executive director of the Kentucky Center for Economic Policy. “And yet these bills keep coming just as we’re about to take tax reform on.”

But House Majority Floor Leader Jonathan Shell, a Lancaster Republican, said that because Bevin plans to propose comprehensive tax reform, he sees only one of the tax breaks to get serious consideration during the remainder of the 2017 session.

That would be House Bill 368 – a bill that gives any contractor who purchases aviation fuel for a certified air carrier a sales tax credit.

Shell said he was not familiar with details of the bill, but said it is related to the newly announced Amazon worldwide cargo hub at Cincinnati/Northern Kentucky International Airport. That project, announced three weeks ago, promises an investment by Amazon of $1.49 billion and the creation of nearly 3,000 jobs.

“The only thing that we may do is whatever we need to do to help out the Amazon jobs that are coming to Northern Kentucky,” Shell said. “The governor’s got those people coming into the state and we need to go ahead and get that done so they get that job creation.”

The sponsor of the bill is Rep. Diane St. Onge, R-Lakeside Park, said the bill is “an incentive for Amazon like what we have done in the past for UPS and other folks.” She declined to elaborate.

Jack Mazurak, spokesman for the Kentucky Economic Development Cabinet, said passage of the bill was not a part of the incentive package the state offered to Amazon.

That bill is scheduled to be considered by the House budget committee on Tuesday.

One expensive and popular tax break is proposed in both House Bill 162 and Senate Bill 102 and would offer an income tax credit for donations to qualified organizations that provide scholarships to private elementary and secondary schools.

Its sponsors and co-sponsors are 11 House Republicans including Education Committee Chairman John Carney and seven Senate Republicans including Education Committee Chairman Mike Wilson and Majority Floor Leader Damon Thayer.

If passed, the measure would result in a loss of $25 million in revenue in 2018-19, a loss that would grow to $76 million by 2023-24.

But many of the proposed tax breaks are more focused and less expensive.

 

Sen. John Schickel, R-Union, has offered Senate Bill 41 which would exempt sales of gold, silver, platinum, palladium bullion and currency from the sales tax.

“It was brought to my attention by a constituent that there’s an exemption for this in Ohio, and because that’s right on the border all the people who trade and deal in that are going to Ohio,” Schickel said.

Schickel said, “It’s really amazing” how many of his constituents buy gold and silver because “don’t have trust in currency.”

But the bill is estimated to cost the state $745,000 in annual revenue, and Schickel agreed it is not likely to pass.

Rep. Jason Nemes, R-Louisville, sponsors House Bill 339 that would establish an income tax credit equaling 20 percent of the fair market value of ”apparently wholesome food” donated in Kentucky.

The bill, Nemes said is which is backed by the restaurant industry, defines “apparently wholesome” food as prepared food that meets all quality and labeling standards “even though the food may not be readily marketable due to appearance, age, freshness…or other conditions.”

Nemes said he recognizes the bill is unlikely to be considered.

“It’s one of two bills I’ve introduced to help the restaurant industry just to get the conversation started,” Nemes said. “But I think most tax credit issues are going to be held over until we have the special session on tax reform.”